ESMT — Audit Report / Information 2022

Dec 16, 2022

ELITE SEMICONDUCTOR

MICROELECTRONICS TECHNOLOGY INC.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2022 AND 2021

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Elite Semiconductor Microelectronics Technology Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Elite Semiconductor Microelectronics Technology Inc. as at December 31, 2022 and 2021, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of Elite Semiconductor Microelectronics Technology Inc. as at December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Parent Company Only Financial Statements section of our report. We are independent of Elite Semiconductor Microelectronics Technology Inc. in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of Elite Semiconductor Microelectronics Technology Inc.’s 2022 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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Key audit matters for Elite Semiconductor Microelectronics Technology Inc.’s 2022 parent company only financial statements are stated as follows:

Allowance for inventory valuation losses

Description

Refer to Note 4(13) for accounting policies on inventory valuation, Note 5(2) for uncertainty of qaccounting estimates and assumptions in relation to inventory valuation losses, and Note 6(5) for details of inventories. As of December 31, 2022, the Company’s inventories and allowance for inventory valuation losses amounted to NT$9,212,355 thousand and NT$865,439 thousand, respectively.

Elite Semiconductor Microelectronics Technology Inc. is primarily engaged in researching, developing, manufacturing, selling integrated circuits. Elite Semiconductor Microelectronics Technology Inc. recognises inventories at the lower of cost and net realisable value. An allowance for inventory valuation losses is provided for those inventories aged over a certain period and those individually identified as obsolete or damaged. As the estimation of net realisable value for individually obsolete or damaged inventories is subject to management’s judgment, we considered the allowance for inventory valuation losses a key audit matter.

How our audit addressed the matter

We have performed primary audit procedures for the above matter, including assessing the reasonability of the policies and procedures adopted to provide for inventory losses based on the understanding of Elite Semiconductor Microelectronics Technology Inc. operations and industry, including the historical information of depletion of inventories, and the rationality of judging obsolete inventory items. We validated the appropriateness of relevant information in the inventory aging report utilised by Elite Semiconductor Microelectronics Technology Inc. to confirm that the information in the report is consistent with its policy. We then evaluated and confirmed the reasonableness of net realisable value for inventories through validating respective supporting documents and information.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement,

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whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing Elite Semiconductor Microelectronics Technology Inc.’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Elite Semiconductor Microelectronics Technology Inc. or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing Elite Semiconductor Microelectronics Technology Inc.’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

• A. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Elite Semiconductor Microelectronics Technology Inc.’s internal control.

• C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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• D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Elite Semiconductor Microelectronics Technology Inc.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause Elite Semiconductor Microelectronics Technology Inc. to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Elite Semiconductor Microelectronics Technology Inc. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of parent company only audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Shu-Chien, Pai For and on behalf of PricewaterhouseCoopers, Taiwan February 23, 2023

[Ya-Huei, Cheng ]

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets	Notes 6(1) 6(2) 6(4) 6(4) and 7(2) 7(2) 6(5) 6(3) 6(6) 6(7) and 8 6(8) 6(9) 6(10)(11) 6(28) 6(12) and 8	December 31, 2022 AMOUNT % $ 3,705,997 19 94,813 1 - - 9 - 886,551 5 1,482 - 81,556 - 100 - 220,468 1 8,346,916 42 440,854 2 821 - 13,779,567 70 6,495 - 1,423,932 7 1,991,347 10 71,272 1 15,761 - 51,410 - 213,192 1 2,140,867 11 5,914,276 30 $ 19,693,843 100	December 31, 2021	December 31, 2021
		AMOUNT $ 3,705,997 94,813 - 9 886,551 1,482 81,556 100 220,468 8,346,916 440,854 821 13,779,567 6,495 1,423,932 1,991,347 71,272 15,761 51,410 213,192 2,140,867 5,914,276 $ 19,693,843	AMOUNT $ 8,749,239 173,513 110,720 - 1,910,845 - 115,503 - - 5,363,309 60,776 170 16,484,075 17,697 1,385,929 1,237,536 69,562 16,731 83,825 3,116 857,372 3,671,768 $ 20,155,843	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortised cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 1210 Other receivables due from related parties 1220 Current income tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non- current 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				43 1 1 - 9 - 1 - - 27 - -
				82
				- 7 6 - - 1 - 4
				18
				100

(Continued)

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity

December 31, 2022 December 31, 2021 Notes AMOUNT % AMOUNT % 6(13) $ 3,175,000 16 $ 1,700,000 8 6(21) 6,096 - 21,399 - 2,399 - 2,205 - 2,132,751 11 2,799,845 14 7(2) 88,172 1 52,939 - 6(14) and 7(2) 1,432,504 7 1,830,027 9 - - 904,582 5 6(12)(24) 530,888 3 - - 9,224 - 7,509 - 6,966 - 5,611 - 7,384,000 38 7,324,117 36 6(15) 643,400 3 - - 19,850 - 18,040 - 6(28) 55,208 - 15,455 - 62,421 1 63,328 1 6(16) 14,634 - 13,488 - 795,513 4 110,311 1 8,179,513 42 7,434,428 37 6(18) 2,861,570 15 2,861,570 14 6(19) 255,317 1 181,329 1 6(20) 2,014,288 10 1,516,762 8 23,906 - - - 6,553,259 33 8,323,076 41 ( 46,310) - ( 23,906) - 6(18) ( 147,700) ( 1) ( 137,416) ( 1 ) 11,514,330 58 12,721,415 63 9 11 $ 19,693,843 100 $ 20,155,843 100

Current liabilities 2100 Short-term borrowings 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total Liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury shares 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items

Year ended December 31, 2022 2021 Notes AMOUNT % AMOUNT % 6(21) and 7(2) $ 16,207,898 100 $ 23,844,898 100 6(5)(26)(27) and 7(2) ( 13,290,337) ( 82) ( 15,165,773) ( 63) 2,917,561 18 8,679,125 37 6(26)(27) 7(2) ( 337,139) ( 2) ( 486,325) ( 2) ( 321,690) ( 2) ( 563,666) ( 2) 7(2) ( 1,533,186) ( 10) ( 1,777,702) ( 8) 12(2) - - 5,713 - ( 2,192,015) ( 14) ( 2,821,980) ( 12) 725,546 4 5,857,145 25 6(22) 83,306 1 27,254 - 6(23) and 7(2) 69,068 - 56,853 - 6(24) 360,144 2 ( 75,268) - 6(25) ( 33,488) - ( 20,341) - 6(6) 35,216 - 63,540 - 514,246 3 52,038 - 1,239,792 7 5,909,183 25 6(28) ( 197,599) ( 1) ( 932,972) ( 4) $ 1,042,193 6 $ 4,976,211 21 6(16) ($ 1,322) - ($ 949) - 6(3) ( 11,202) - ( 14,721) - ( 11,202) - ( 14,721) - ($ 23,726) - ($ 30,391) - $ 1,018,467 6 $ 4,945,820 21 6(29) $ 3.71 $ 17.76 $ 3.71 $ 17.63

4000 Operating revenue 5000 Operating costs 5950 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period Other comprehensive income-net Other comprehensive income components that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8300 Other comprehensive loss for the period-net 8500 Total comprehensive income for the period Profit attributable to: Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Notes 2021 Balance at January 1, 2021 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the period Distribution of 2020 earnings: 6(20) Legal reserve appropriated Cash dividends of ordinary share Reversal of special reserve Disposal of parent company's share by subsidiary recognised as treasury share 6(19) Recognition of changes in ownership interests in subsidiaries - cash dividends distributed by subsidiaries 6(19) Adjustment of capital surplus due to cash dividends that subsidiaries received from parent 6(19) Recognition of changes in ownership interests in subsidiaries - subsidiary acquired non-controlling interests 6(19) Difference between proceeds on actual acquisition of equity interest in a subsidiary and its carrying amount 6(19) Issuance of new shares due to employee stock options exercised 6(17)(18)(19) Expired cash dividends transferred to capital surplus 6(19) Balance at December 31, 2021 2022 Balance at January 1, 2022 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the period Distribution of 2021 earnings: 6(20) Legal reserve appropriated Cash dividends of ordinary share Special reserve appropiated Acquisition of the Company's share by subsidiary recognised as treasury share Recognition of changes in ownership interests in subsidiaries - cash dividends distributed by subsidiaries 6(19) Adjustment of capital surplus due to cash dividends that subsidiaries received from parent 6(19) Recognition of changes in ownership interests in subsidiaries - subsidiary acquired non-controlling interests 6(19) Change in associates and joint ventures accounted for using equity method 6(19) Expired cash dividends transferred to capital surplus 6(19) Balance at December 31, 2022	Notes		Share capital - common stock		Capital surplus				Retained Earnings				Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income		Treasuryshares		Total equity
							Legal reserve		Special reserve		Unappropriated retained earnings
			$ 2,857,589 - - - - - - - - - - - 3,981 - $ 2,861,570 $ 2,861,570 - - - - - - - - - - - - $ 2,861,570		$ 109,677 - - - - - - 40,089 1,146 11,739 ( 27 ) ( 311 ) 18,946 70 $ 181,329 $ 181,329 - - - - - - - 989 44,720 ( 29 ) 28,165 143 $ 255,317		$ 1,409,039 - - - 107,723 - - - - - - - - - $ 1,516,762 $ 1,516,762 - - - 497,526 - - - - - - - - $ 2,014,288		$ 8,524 - - - - - ( 8,524 ) - - - - - - - $ - $ - - - - - - 23,906 - - - - - - $ 23,906		$ 4,019,327 4,976,211 ( 949 ) 4,975,262 ( 107,723 ) ( 572,314 ) 8,524 - - - - - - - $ 8,323,076 $ 8,323,076 1,042,193 ( 1,322 ) 1,040,871 ( 497,526 ) ( 2,289,256 ) ( 23,906 ) - - - - - - $ 6,553,259		$ 5,536 - ( 29,442 ) ( 29,442 ) - - - - - - - - - - ($ 23,906 ) ($ 23,906 ) - ( 22,404 ) ( 22,404 ) - - - - - - - - - ($ 46,310 )		($ 145,649 ) - - - - - - 8,233 - - - - - - ($ 137,416 ) ($ 137,416 ) - - - - - - ( 10,284 ) - - - - - ($ 147,700 )		$ 8,264,043 4,976,211 ( 30,391 ) 4,945,820 - ( 572,314 ) - 48,322 1,146 11,739 ( 27 ) ( 311 ) 22,927 70 $ 12,721,415 $ 12,721,415 1,042,193 ( 23,726 ) 1,018,467 - ( 2,289,256 ) - ( 10,284 ) 989 44,720 ( 29 ) 28,165 143 $ 11,514,330

The accompanying notes are an integral part of these parent company only financial statements.

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Expected credit impairment gain Net loss (gain) on financial assets at fair value through profit or loss Interest expenses Interest income Dividend income Impairment loss Share of profit of associates and joint ventures accounted for using equity method Onerous contracts losses Gains on lease modifications Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit and loss Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Prepayments Other current assets Other non-current assets Changes in operating liabilities Notes payable Accounts payable Accounts payable-related parties Contract liabilities Other payables Other current liabilities Other non-current liabilities Cash (outflow) inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows (used in) from operating activities

YearendedDecember 31, Notes 2022 2021 $ 1,239,792 $ 5,909,183 6(7)(8)(9)(26) 505,867 401,657 6(10)(26) 122,085 116,866 12(2) - ( 5,713 ) 6(2)(24) 11,804 ( 52,007 ) 6(25) 33,488 20,341 6(22) ( 83,306 ) ( 27,254 ) 6(23) ( 771 ) ( 3,155 ) 6(10)(11)(24) - 18,302 ( 35,216 ) ( 63,540 ) 6(12)(24) 530,888 - 6(24) ( 1,213 ) ( 4 ) 66,896 47,042 ( 9 ) - 1,024,294 ( 400,325 ) ( 1,482 ) 973 35,879 ( 17,200 ) 100 - ( 2,983,607 ) 606,335 ( 380,078 ) ( 37,299 ) ( 651 ) 5,013 ( 1,182,950 ) - 194 90 ( 667,094 ) 518,187 35,233 52,939 ( 15,303 ) 16,063 ( 395,340 ) 1,193,033 1,355 ( 3,639 ) 104 ( 2,049 ) ( 2,139,041 ) 8,293,839 81,174 23,562 ( 29,390 ) ( 19,246 ) ( 1,492,972 ) ( 172,357 ) ( 3,580,229 ) 8,125,798

(Continued)

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortised cost Disposal of financial assets at amortised cost Acquisition of property, plant and equipment Acquisition of intangible assets Increase in refundable deposits Dividends received Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Increase in long-term borrowings Increase (decrease) short-term notes and bills payable Repayment of lease liabilities Decrease in guarantee deposit received Proceeds from exercise of employee stock options Cash dividends paid Expired cash dividends Net cash flows used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31, Notes 2022 2021 ($ 83,540 ) ($ 144,324 ) 194,260 170,308 6(30) ( 1,269,380 ) ( 850,539 ) 6(30) ( 89,454 ) ( 106,876 ) ( 86,279 ) ( 836,550 ) 50,343 18,250 ( 1,284,050 ) ( 1,749,731 ) 6(30) 1,475,000 360,000 6(30) 643,400 - 6(30) 271 ( 148,869 ) 6(30) ( 8,241 ) ( 7,499 ) 6(30) ( 280 ) ( 298 ) - 22,927 6(20) ( 2,289,256 ) ( 572,314 ) 6(19) 143 70 ( 178,963 ) ( 345,983 ) ( 5,043,242 ) 6,030,084 6(1) 8,749,239 2,719,155 6(1) $ 3,705,997 $ 8,749,239

The accompanying notes are an integral part of these parent company only financial statements.

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ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. AND SUBSIDIARIES NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANISATION

Elite Semiconductor Microelectronics Technology Inc. (the “Company”) was incorporated in May 1998 and commenced operations in December 1998. The Company is engaged in the research, development, production, manufacturing, and sales of dynamic and static random access memory, flash memory, analog integrated circuit, analog and digital mixed integrated circuit. The Company is also engaged in the related design and technical R&D services for the above products.

The Company merged with Ji Xin Technology Co., Ltd. on December 5, 2005, and merged with Eon Silicon Solution Inc. on June 8, 2016, with the Company as the surviving company.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised for issuance by the Board of Directors on February 23, 2023.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2022 are as follows:

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard (“IASB”)
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

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(2) Effect of new issuances of or amendments to IFRSs that came into effect as endorsed by the FSC

but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

but not yet adopted by the Company New standards, interpretations and amendments endorsed by the FSC follows:	effective from 2023 are
	Effective date by
New Standards,Interpretations andAmendments	IASB
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) Effect of IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

	Effective date by
New Standards,Interpretations andAmendments	IASB
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	IASB
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17,‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17,‘Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current	January 1, 2024
or non-current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

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(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

  • (a) Financial assets (including derivative instruments) at fair value through profit or loss.

  • (b) Financial assets at fair value through other comprehensive income.

  • (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”), requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

• Items included in the parent company only financial statements are measured using the currency of the primary economic environment in which the Company operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional currency.

Foreign currency transactions and balances

• A. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• B. Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re - translation at the balance sheet date are recognised in profit or loss.

• C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re -translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are retranslated at the exchange rates prevailing at the balance sheet date; their translation difference s are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• D. All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses.

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(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

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• (7) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment.

  • Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved by collecting contractual cash flows.

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• D. The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(10) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(12) Operating leases(lessor)

Rental income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight -line basis over the lease term.

• (13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads. It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

• (14) Investments accounted for using equity method / subsidiaries and associates

• A. Subsidiaries are entities controlled by the Company (including structured entities). The Company controls the entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. All unrealised profit or loss resulting from transactions between the Company and its subsidiaries have been eliminated in full. Accounting policies of subsidiaries have been adjusted when necessary in order to be consistent with those of the Company.

• C. The Company’s share of profit or loss in subsidiaries after acquisition is recognised in profit or loss, whereas its share of other comprehensive income in subsidiaries after acquisition is recognised in other comprehensive income. If the Company’s share of loss in a subsidiary exceeds its share of equity in such a subsidiary, the Company continues to recognise losses in its shareholding percentage.

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• D. If a change in shareholding in a subsidiary does not result in a loss o f control (i.e. transactions with non-controlling interests), such a change is accounted for as an equity transaction, that is, a transaction with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• F. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• J. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

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• K. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• L. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

• (15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

  • Buildings and structures 3~50 years

  • Machinery and equipment 3~8 years

  • Testing equipment 3~8 years

  • Others 3~10 years

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(16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term.

  • Starting from the lease date, the Company assesses whether it can reasonably determine its option to extend the lease or purchase the underlying asset, or not to terminate the lease. The Company considers all relevant facts and circumstances that will generate economic incentives to exercise or not exercise the options. Such circumstances include all expected changes in facts and situations from the start of the lease to the day when the option is exercised. Main factors to consider include contractual terms and conditions within the period of options and the importance of the underlying asset to the lessee’s operations, etc. The lease term will be reassessed if a significant change or a major change in circumstances occurs within the Company's control range. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost. The cost is the amount of the initial measurement of lease liability. The right -of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• (17) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Investment property is depreciated on a straight-line basis over its estimated useful life of 20 years.

• (18) Intangible assets

• A. Patents, professional technology, and customer relationship Separately acquired patent is stated at historical cost. Patents, professional technology, and customer relationship acquired in a business combination are recognised at fair value at the acquisition date, and amortised on a straight-line basis over their estimated useful lives of 3 years.

• B. Goodwill

  • Goodwill arises in a business combination accounted for by applying the acquisition method.

• C. Other intangible assets, mainly computer software, are stated at cost and amortised on a straightline basis over their estimated useful lives of 1 ~ 3 years.

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(19) Impairment of non-financial assets

• A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• B. The recoverable amount of goodwill is evaluated periodically. An impairment loss is recognised for the amount by which the asset ’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or Company of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or Company of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(20) Borrowings

• Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(21) Notes and accounts payable

• Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. However, for shortterm accounts payable without bearing interest, as the effect of discounting is insignificant, they are measured subsequently at original invoice amount.

(22) Derecognition of financial liabilities

• A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

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(23) Provisions

Provisions (including decommissioning liabilities and onerous contracts) are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

(24) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

  • I. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds at the balance sheet date of a currency and term consistent with the currency and term of the employment benefit obligations.

  • II. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as other equity.

  • III. Past service costs are recognised immediately in profit or loss.

• C. Employees’ compensation and directors’ remuneration

• Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee

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compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

- (25) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

(26) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

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• E. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

• (27) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(28) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(29) Revenue recognition

• A. The Company manufactures and sells integrated circuit. Sales are recognised when control of the products has transferred, being when the products are delivered to the customers, the customers has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customers’ acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customers, and either the customers has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. The Company accepts sales orders from customers. Sales revenue is recognised according to the contract price, and the Company transfers the promised goods or services to customers. Since the customer's payment period does not exceed one year, the Company has not adjusted the monetary time value of the transaction price.

• C. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

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5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

• A. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As at December 31, 2022, the carrying amount of inventories was $8,346,916.

• B. Evaluation of onerous contract losses

A portion of refundable deposits of the Company is a capacity reservation agreement with the supplier. According to the agreement, if the Company’s actual purchased quantities does not meet the agreed requirements, the prepaid guaranty fund will be forfeited based on the agreement, and the agreement cannot be terminated. In response to the recent fluctuations in the overall market economic environment affecting market demand, the Company has made onerous contracts losses.

As at December 31, 2022, the carrying amount of the provision for onerous contract was $530,888.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2022 115 $ 711,798 2,994,084 3,705,997 $	December31,2021
		115 $ 747,543 8,001,581
		8,749,239 $

• A. The Company transacts with various financial institutions with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. Details of the Company's cash and cash equivalents pledged to others as collateral are provided in Note 8.

• C. To achieve its goal of sustainable development for the environment, the Company's time deposits include the green deposits amounting to $10,000 as at December 31, 2022.

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(2) Financial assets at fair value through profit or loss

==> picture [478 x 166] intentionally omitted <==

----- Start of picture text -----

Items December 31, 2022 December 31, 2021
Current items:
Financial assets mandatorily measured at fair value
through profit or loss
Listed stocks $ 286 $ 286
Emerging stocks 7,767 69,438
Beneficiary certificates 45,465 45,465
Corporate bonds 31,226 31,226
Subtotal 84,744 146,415
Valuation adjustment 10,069 27,098
Total $ 94,813 $ 173,513
----- End of picture text -----

• A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

loss are listed below:
	Years ended		December 31,
	2022				2021
Financial assets mandatorily measured at fair
value through profit or loss
Equity instruments	($	3,554)		$	52,087
Debit instruments	(	6,939)			1,504
Beneficiary certificates	(	1,311)	(		1,584)
Total	($	11,804)		$	52,007

• B. The Company has no financial assets at fair value through profit or loss pledged to others.

• C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2)C(b).

(3) Financial assets at fair value through other comprehensive income

Items		December	31,2022		December	31,2021
Non-current items:
Equity instruments
Unlisted stocks		$	29,650		$	29,650
Valuation adjustment	(		23,155)	(		11,953)
		$	6,495		$	17,697

The Company has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $6,495 and $17,697 as at December 31, 2022, and 2021, respectively.

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(4) Accounts receivable

Accounts receivable
A. The aging analysis of accounts receivable is as follows: December31,2022 Accounts receivable - general customers 886,551 $ Accounts receivable - related parties 1,482 888,033 Less: Allowance for uncollectible accounts - 888,033 $ December31,2022 Not past due 878,807 $ Up to 30 days 9,226 31 to 90 days - 91 to 180 days - Over 181 days - 888,033 $	December31,2021 1,910,845 $ - 1,910,845 - 1,910,845 $
	December 31, 2021
	1,910,504 $ 341 - - -
	1,910,845 $

The above aging analysis is based on past due date.

• B. As at December 31, 2022, and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s accounts receivable were $888,033 and $1,910,845, respectively.

• C. The fair value of the collaterals held by the Company as guarantee for accounts receivable are as follows:

follows:
Bank guarantee Pledged certificates of deposit Guarantee deposits received (shown as "other non-current liabilities") Letters of credit Company promissory notes/checks	December31,2022 42,284 $ 39,923 5,621 812,396 507,813 1,408,037 $	December31,2021
		55,304 $ 17,992 5,106 935,013 667,065
		1,680,480 $

• D. Information relating to credit risk of accounts receivable is provided in Note 12(2).

• E. As at December 31, 2022, and 2021, accounts receivable were all from contracts with customers. As at January 1, 2021, the balance of receivables from contracts with customers amounted to $1,505,780.

• F. The Company has no accounts receivable pledged to others.

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(5) Inventories

Raw materials Work in process Finished goods Inventory in transit Raw materials Work in process Finished goods Inventory in transit	Allowance for Cost valuation loss Bookvalue 459,626 $ 1,314) ($ 458,312 $ 6,467,614 519,747) ( 5,947,867 2,280,691 344,378) ( 1,936,313 4,424 - 4,424 9,212,355 $ 865,439) ($ 8,346,916 $ Allowance for Cost valuation loss Book value 58,400 $ 842) ($ 57,558 $ 3,688,463 3,188) ( 3,685,275 1,621,180 20,856) ( 1,600,324 20,152 - 20,152 5,388,195 $ 24,886) ($ 5,363,309 $ December31,2022 December31,2021

The cost of inventories recognised as expense for the years:

Cost of goods sold Loss on market value decline and obsolete and slow-moving inventories (gain on reversal of decline)	2022 2021 12,449,784 $ 15,239,658 $ 840,553 73,885) ( 13,290,337 $ 15,165,773 $ Years endedDecember31,

As the Company sold some inventory which were previously provided with allowance for decline in market value, the Company recognised gain on reversal of decline in market value for the years ended December 31, 2021.

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(6) Investments accounted for using equity method

		Years ended	December31,	December31,
		2022		2021
Subsidiaries:
Elite Investment Services Ltd.	$	667,546	$	612,100
Charng Feng Investment Ltd.		549,356		566,029
Jie Yong Investment Ltd.		178,955		188,931
Elite Semiconductor Memory Technology Inc.		29,725		20,551
Eon Silicon Solution Inc. USA	(	1,650)	(	1,682)
	$	1,423,932	$	1,385,929

Information about the subsidiaries is provided in Note 4(3) in the 2022 consolidated financial statements.

(7) Property, plant and equipment

At January 1, 2022 Cost Accumulated depreciation and impairment 2022 At January 1 Additions Transfers (Note) Depreciation charge At December 31 At December 31, 2022 Cost Accumulated depreciation and impairment	Buildings Machinery Land and structures equipment Test equipment Others Total 168,768 $ 667,335 $ 700,438 $ 329,940 $ 1,916,684 $ 3,783,165 $ - 433,861) ( 413,484) ( 194,253) ( 1,504,031) ( 2,545,629) ( 168,768 $ 233,474 $ 286,954 $ 135,687 $ 412,653 $ 1,237,536 $ 168,768 $ 233,474 $ 286,954 $ 135,687 $ 412,653 $ 1,237,536 $ 394,130 351,974 46,559 42,442 402,966 1,238,071 - - 9,259 2,826 - 12,085 - 37,071) ( 56,683) ( 31,779) ( 370,812) ( 496,345) ( 562,898 $ 548,377 $ 286,089 $ 149,176 $ 444,807 $ 1,991,347 $ 562,898 $ 1,019,309 $ 756,256 $ 375,208 $ 2,319,650 $ 5,033,321 $ - 470,932) ( 470,167) ( 226,032) ( 1,874,843) ( 3,041,974) ( 562,898 $ 548,377 $ 286,089 $ 149,176 $ 444,807 $ 1,991,347 $	Total
		1,991,347 $

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At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Additions Transfers (Note) Depreciation charge At December 31 At December 31, 2021 Cost Accumulated depreciation and impairment

Buildings Machinery Land and structures equipment Test equipment Others Total 9,023 $ 636,446 $ 518,018 $ 284,731 $ 1,480,677 $ 2,928,895 $ - 398,943) ( 375,047) ( 165,365) ( 1,213,527) ( 2,152,882) ( 9,023 $ 237,503 $ 142,971 $ 119,366 $ 267,150 $ 776,013 $ 9,023 $ 237,503 $ 142,971 $ 119,366 $ 267,150 $ 776,013 $ 159,745 23,581 157,570 20,516 436,007 797,419 - 7,308 24,850 24,693 - 56,851 - 34,918) ( 38,437) ( 28,888) ( 290,504) ( 392,747) ( 168,768 $ 233,474 $ 286,954 $ 135,687 $ 412,653 $ 1,237,536 $ 168,768 $ 667,335 $ 700,438 $ 329,940 $ 1,916,684 $ 3,783,165 $ - 433,861) ( 413,484) ( 194,253) ( 1,504,031) ( 2,545,629) ( 168,768 $ 233,474 $ 286,954 $ 135,687 $ 412,653 $ 1,237,536 $

Note: Transferred from prepayments for equipment (shown as “Other non-current assets”).

• A. For the years ended December 31, 2022 and 2021, there was no capitalisation of borrowing costs attributable to the intangible assets.

• B. The Company has no property, plant and equipment pledged to others.

• －

• (8) Leasing arrangements lessee

• A. The Company leases various assets including land, buildings and structures, business vehicles, and printers. Rental contracts are typically made for periods of 2 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Shortterm leases with a lease term of 12 months or less comprise of business vehicles and staff dormitory.

~31~

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings and structures Business vehicles Printers	December31,2022 December31,2021 57,912 $ 58,801 $ 3,662 5,079 7,204 2,565 2,494 3,117 71,272 $ 69,562 $ Book value

		Years ended	December 31,	December 31,
		2022		2021
		Depreciation		charge
Land	$	3,574	$	3,420
Buildings and structures		1,417		1,417
Business vehicles		2,938		2,480
Printers		623		623
	$	8,552	$	7,940

• C. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $7,576 and $5,702, respectively.

• D. The information on profit and loss accounts relating to lease contracts is as follows:

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----- Start of picture text -----

Years ended December 31,
2022 2021
Items affecting profit or loss
Interest expense on lease liabilities $ 815 $ 1,074
$ 558 $ 533
Expense on short-term lease contracts
----- End of picture text -----

• E. For the years ended December 31, 2022 and 2021, the Company’s total cash outflow for leases were $9,614 and $9,106, respectively.

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(9) Investment property

nvestment property
At January 1, 2022 Cost Accumulated depreciation and impairment 2022 At January 1 Depreciation charge At December 31 At December 31, 2022 Cost Accumulated depreciation and impairment At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Depreciation charge At December 31 At December 31, 2021 Cost Accumulated depreciation and impairment	Buildings and structures
	20,369 $ 3,638) ( 16,731 $ 16,731 $ 970) ( 15,761 $ 20,369 $ 4,608) ( 15,761 $ 20,369 $ 2,668) ( 17,701 $ 17,701 $ 970) ( 16,731 $ 20,369 $ 3,638) ( 16,731 $ Buildings and structures

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period	Years ended December31,
	2022 2,562 $ 970 $	2021
		2,562 $
		970 $

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• B. The fair value of the investment property held by the Company as at December 31, 2022 and 2021 was $8,314 and, $8,130, respectively, which was valued by income approach. Key assumptions are as follows:

assumptions are as follows:
Rate of net return on capital (Note)		December31,2022	December31,2021
		17.37%	18.57%

  - Note: Calculated based on the weighted average capital cost of capital.

• C. For the years ended December 31, 2022 and 2021, there was no capitalisation of borrowing costs attributable to the investment property.

• D. The Company has no investment property pledged to others.

• (10) Intangible assets

Intangible assets
			Patents and
		professional				Customer
			technology			relationship			Goodwill			Others			Total
At January 1, 2022
Cost		$	34,478		$	11,000		$	80,758		$	642,413		$	768,649
Accumulated amortisation
and impairment	(		34,478)	(		11,000)	(		80,758)	(		558,588)	(		684,824)
		$	-		$	-		$	-		$	83,825		$	83,825
2022
At January 1		$	-		$	-		$	-		$	83,825		$	83,825
Additions			-			-			-			89,454			89,454
Transfers (Note)			-			-			-			216			216
Amortisation			-			-			-	(		122,085)	(		122,085)
At December 31		$	-		$	-		$	-		$	51,410		$	51,410
At December 31, 2022
Cost		$	34,478		$	11,000		$	80,758		$	637,902		$	764,138
Accumulated amortisation
and impairment	(		34,478)	(		11,000)	(		80,758)	(		586,492)	(		712,728)
		$	-		$	-		$	-		$	51,410		$	51,410

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Patents and
professional Customer
technology relationship Goodwill Others Total
At January 1, 2021
Cost $ 34,478 $ 11,000 $ 80,758 $ 535,108 $ 661,344
Accumulated amortisation
and impairment ( 30,654) ( 11,000) ( 62,456) ( 445,546) ( 549,656)
$ 3,824 $ - $ 18,302 $ 89,562 $ 111,688
2021
At January 1 $ 3,824 $ - $ 18,302 $ 89,562 $ 111,688
Additions - - - 106,876 106,876
Transfer (Note) - - - 429 429
Amortisation ( 3,824) - - ( 113,042) ( 116,866)
Impairment loss - - ( 18,302) - ( 18,302)
At December 31 $ - $ - $ - $ 83,825 $ 83,825
At December 31, 2021
Cost $ 34,478 $ 11,000 $ 80,758 $ 642,413 $ 768,649
Accumulated amortisation
and impairment ( 34,478) ( 11,000) ( 80,758) ( 558,588) ( 684,824)
$ - $ - $ - $ 83,825 $ 83,825
----- End of picture text -----

Note: Transferred from prepayments for equipment (shown as “Other non-current assets”).

A.Details of amortisation on intangible assets are as follows:

Operating costs Selling expenses General and administrative expenses Research and development expenses	Years endedDecember31,	Years endedDecember31,
	2022 - $ 313 3,261 118,511 122,085 $	2021
		3,824 $ 372 1,864 110,806
		116,866 $

• B. For the years ended December 31, 2022 and 2021, there was no capitalisation of borrowing costs attributable to the intangible assets.

• C. Impairment information about the intangible assets is provided in 6(11).

• D. The Company has no intangible assets pledged to others.

(11) Impairment of non-financial assets

The Company carried out the impairment assessments on the recoverable amount of goodwill on the balance sheet date. The recoverable amount of cash-generating units is determined based on the value-in-use calculations. These calculations use cash flow projections approved by the management covering a five-year period as the basis for estimation. The discount rate was 18.57% in 2021. The value-in-use used by the Company to calculate cash-generating units is derived from historical information on estimated future revenue growth rates, gross profit margins, and operating expense ratios, with reference to future industrial economic trends. The recoverable amount calculated based on the above key assumptions is lower than the book value of goodwill. As a result, the Company recognised impairment losses of $18,302 for the year

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ended December 31, 2021.

For the year ended December 31, 2022 : none.

(12) Other non-current assets

Prepayments for purchases Refundable deposits (Note 1) Prepayments for equipment Pledged time deposits	December31,2022 December31,2021 1,182,950 $ - $ 927,380 841,101 26,568 12,302 3,969 3,969 2,140,867 $ 857,372 $

Note 1: A portion of refundable deposits of the Company is a capacity reservation agreement with the supplier. According to the agreement, the Company promises to purchase wafer production capacity within the agreed period and quantities after the Company has paid the guaranty fund in advance, the supplier will then provide the agreed production capacity to the Company. If the Company's actual purchased quantities does not meet the agreed requirements, the prepaid guaranty fund will be forfeited based on the agreement, and the agreement cannot be terminated. In response to the recent fluctuations in the overall market economic environment affecting market demand, the Company has made provision for onerous contracts liabilities, and recognised them under provisions for liabilities and other losses, respectively.

(13) Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Credit borrowings Type ofborrowings Bank borrowings Credit borrowings	December31,2022 3,175,000 $ December 31, 2021 1,700,000 $	Interestraterange 1.56%~2.275% Interestraterange 0.70%~0.86%	Collateral
			None Collateral
			None

Interest expense recognised in profit or loss amounted to $30,588 and $16,829 for the years ended December 31, 2022 and 2021, respectively.

(14) Other payables

December 31, 2022 and 2021, respectively. Other payables
Accrued salaries and bonuses Accrued employees' compensation and directors' remuneration Payables on equipment Others	December31,2022 1,153,979 $ 25,302 90,089 163,134 1,432,504 $	December31,2021
		1,255,968 $ 377,182 94,831 102,046
		1,830,027 $

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- (15) Long term borrowings

Borrowing period and Type of borrowings repayment term Interest rate range Collateral December 31, 2022 Long-term bank borrowings Land, buildings Secured borrowings Note 1.425%~1.55% and structures $ 643,400 - Less:Current portion $ 643,400

Note: Borrowing period is from October 7, 2022 to October 7, 2037, interest is repayable monthly, and starting from October, 2025, the same amount of principal is repayable every three mounth.

As at December 31, 2021: None.

(16) Pension

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor standards Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

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(b) The amounts recognised in the balance sheet are as follows:

		December31,2022	December	31,2021
Present value of defined benefit
obligations	($	8,817)	($	8,474)
Fair value of plan assets		435		117
	(	8,382)	(	8,357)
Unadjusted amount for the period		-		1,402
Net liability recognised in the balance
sheet	($	8,382)	($	6,955)

• (c) Movements in net defined benefit liabilities are as follows:

2022 At January 1 Current servise cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution At December 31	Present value of defined benefit obligations		Fair value of plan assets	Net defined benefit liability
	8,474) ($ 176) ( 59) ( 8,709) ( - 528 636) ( 108) ( - 8,817) ($		117 $ - 1 118 178 - - 178 139 435 $	8,357) ($ 176) ( 58) ( 8,591) ( 178 528 636) ( 70 139 8,382) ($

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Present value of defined benefit obligations 2021 At January 1 14,033) ($ Current servise cost 333) ( Interest (expense) income 42) ( 14,408) ( Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in demographic assumptions 9) ( Change in financial assumptions 382 Experience adjustments 537 910 Pension fund contribution - Paid pension 5,024 Unadjusted amount for the period - At December 31 8,474) ($		Fair value of plan assets	Net defined benefit liability
	2,663 $ - 7 2,670 39 - - - 39 2,432 5,024) ( - 117 $		11,370) ($ 333) ( 35) ( 11,738) ( 39 9) ( 382 537 949 2,432 - 1,402 6,955) ($

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund ’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two -year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company have no right to participate in managing and operating that fund and hence the Company are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as at December 31, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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(e) The principal actuarial assumptions used were as follows:

	Years ended December 31,
	2022 2021
Discount rate	1.30% 0.70%
Future salary increase	3.00% 3.00%

Assumptions regarding future mortality experience are set based on the sixth life experience table in Taiwan for the years ended December 31, 2022 and 2021. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

obligation is affected. The analysis was as follows:	ed. The analysis was as follows:	ed. The analysis was as follows:	ed. The analysis was as follows:
Increase 0.25% Decrease 0.25% December 31, 2022 Effect on present value of defined benefit obligation 209) ($ 215 $ December 31, 2021 Effect on present value of defined benefit obligation 223) ($ 230 $ Discount rate	Discount rate				Future salaryincreases
	Increase 0.25%		Decrease 0.25%		Increase 0.25% Decrease 0.25% 189 $ 185) ($ 204 $ 199) ($
			215 $ 230 $

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methodology and assumptions used in preparing the sensitivity analysis are same as prior year.

• (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2023 amount to $144.

• (g) As at December 31, 2022, the weighted average duration of the retirement plan is 10 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year 2-5 year Over 5 years	- $ - 896 9,114
	10,010 $

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• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The pension costs under the above pension plans of the Company for the years ended December 31, 2022 and 2021 were $37,013 and $32,440, respectively.

• (17) Share-based payment

• A. For the years ended December 31, 2022 and 2021, the Company’s share-based payment arrangements were as follows:

arrangements were as follows:
Type ofarrangement	Grant date	Quantity granted	Contract period	Vesting conditions
Succeeding of 2010 Eon Silicon Solution Inc.'s employee stock options Succeeding of 2013 Eon Silicon Solution Inc.'s employee stock options	August 10, 2010, October 15, 2010 and January 13, 2011 August 19, 2013	4,000 thousand shares (Note 2) 7,500 thousand shares (Note 2)	10 years 10 years	Note 1 Note 1

• Note 1: The accumulative proportion of the new shares that can be vested and exercised after fulfilling two years of service, three years of service, and four years of service are 50%, 75% and 100%, respectively.

• Note 2: The quantities granted by the Company from the succeeding of Eon Silicon Solution Inc. employee stock option plan was the same quantities granted on the grant date of the original plan. After the merger, the succeeding of Eon Silicon Solution Inc.’s 2010 and 2013 employee stock option plans were 219 thousand shares and 688 thousand shares, respectively.

The above share-based payment arrangements are settled by equity.

~41~

• B. Details of the share-based payment arrangements are as follows:

Succeeding of Eon Silicon Solution Inc.’s employee stock options:

Options outstanding at January 1 Options exercised Options expired Options outstanding at December 31 Option exercisable at December 31		No. of options Weighted-average exercise price (in dollars) No. of options Weighted-average exercise price (in dollars) 14 57.6 $ 518 $ 57.6~217.4 - - 398) ( 57.6 - - 106) ( 217.4 14 53.3 $ 14 57.6 $ 14 14 2022 2021

• C. No stock options were exercised for the year ended December 31, 2022. The weighted-average stock price of stock options at exercise dates for the year ended December 31, 2021 was $85.2 (in dollars).

• D. As at December 31, 2022 and 2021, the range of exercise prices of stock options outstanding were $53.3 (in dollars), and $57.6 (in dollars), respectively; the weighted-average remaining contractual period was 0.64 years, and 1.64 years, respectively.

• E. Expenses incurred on share-based payment transactions for the years ended December 31, 2022 and 2021 were all $0.

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(18) Share capital

• A. As at December 31, 2022, the Company’s authorised capital was $3,500,000, consisting of 350,000 thousand shares of ordinary stock (including 20,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,861,570 with a par value of $10 (in dollars) per share.

Movements in the number of the Company's ordinary shares outstanding are as follows:

			Unit：Thousands of shares
		2022	2021
Outstanding ordinary shares at January 1		272,803	271,605
Employee stock options exercised		-	398
Acquisition of parent company's share by
subsidiary recognised as treasury shares	(	355)	-
Disposal of parent company's share by
subsidiary recognised as treasury shares		-	800
Outstanding ordinary shares
at December 31		272,448	272,803
Treasury shares at the end of the year		13,709	13,354
Issued ordinary shares at December 31		286,157	286,157

B. Treasury shares

Due to the Company’s business strategy, the number of the Company’s shares held by the Company’s subsidiary, Jie Young Investment Ltd., as at December 31, 2022 and 2021, were 13,709 thousand shares and 13,354 thousand shares with carrying amounts of $352,845 and $328,276, respectively; the average book value per share was $25.74 and $24.58, and the fair values per share were $65.0 and $165.0, respectively.

~43~

(19) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

At January 1 Recognition of changes in ownership interests in subsidiaries - cash dividends distributed by subsidiaries Adjustment of capital surplus due to cash dividends that subsidiaries received from parent Recognition of changes in ownership interests in subsidiaries - subsidiary acquired non-controlling interests Change in associates and joint ventures accounted for using equity mothod Expired cash dividends transferred to capital surplus At December 31					2022
		Share premium	Treasury share transactions		Changes in ownership interests in subsidiaries		Employee stock options 2,697 $ - - - - - 2,697 $
		20,162 $ - - - - - 20,162 $		41,750 $ - - - - - 41,750 $	112,786 $ 989 44,720 29) ( 28,165 - 186,631 $

~44~

At January 1 Disposal of company's share by subsidiary recognised as treasury share Recognition of change in ownership interests in subsidiaries - cash dividends distributed by subsidiaries Adjustment of capital surplus due to cash dividends that subsidiaries received from parent Recognition of change in ownership interests in subsidiaries - subsidiary acquired non-controlling interests Difference between proceeds on actual acquisition of equity interest in a subsidiary and its carrying amount Issuance of new shares due to employee stock options exercised Expired cash dividends transferred to capital surplus At December 31		Share premium	Treasury share transactions Changes in ownership interests in subsidiaries 1,661 $ 100,239 $ 40,089 - - 1,146 - 11,739 - 27) ( - 311) ( - - - - 41,750 $ 112,786 $ 2021	Employee stock options 3,913 $ - - - - - 1,216) ( - 2,697 $	Others Total 3,864 $ 109,677 $ - 40,089 - 1,146 - 11,739 - 27) ( - 311) ( - 18,946 70 70 3,934 $ 181,329 $
		- $ - - - - - 20,162 - 20,162 $

(20) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be appropriated in the following order:

• (a) Payment of all taxes and dues.

• (b) Offset previous years, operating losses, if any

• (c) Setting aside 10% of remaining amount as legal reserve, unless the accumulated amount of the legal reserve has reached the total authorised capital of the Company

• (d) Setting aside or reversing a special reserve according to relevant regulations.

• (e) The remainder from this year and prior years may be appropriated as dividends according to a resolution in the shareholders’ meeting.

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B. Dividend policy

• The Company is in the growth phase. To meet future operation requirements, long-term financial plan and the requirement of cash dividends distributing to the shareholders, the distributable earnings for current year can be entirely distributed to the shareholders, which shall be proposed by the Board of Directors and resolved in the shareholders’ meeting every year. Dividends to the shareholders can be distributed in the form of cash or shares, and cash dividends shall account for at least 50% of the total dividends distributed.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reserved subsequently, the reversed amount could be included in the distributable earnings.

• E. As approved by the Board of Directors on February 26, 2021, the appropriations of 2020 earnings would be legal reserve of $107,724 and cash dividend of $2 (in dollars) per share. The aforementioned appropriations had been resolved in the shareholders’ meeting on July 12, 2021, and distributed on July 30, 2021.

• F. As approved by the Board of Directors on February 25, 2022, the appropriations of 2021 earnings would be legal reserve of $497,526 and cash dividend of $2,289,256, constituting $8 (in dollars) per share. The aforementioned appropriations had been resolved in the shareholders’ meeting on June 15, 2022, and distributed on July 29, 2022.

• G. As approved by the Board of Directors on February 23, 2023, the appropriations of 2022 earnings would be legal reserve of $104,087 and cash dividend of $1.8(in dollars) per share. The aforementioned appropriations had not yet been approved at the shareholders’ meeting.

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(21) Operating revenue

Operating revenue
		Years ended	December31,
		2022		2021
Revenue from contracts with customers	$	16,207,898	$	23,844,898

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time in the following major geographical regions:

==> picture [464 x 112] intentionally omitted <==

----- Start of picture text -----

Year ended December 31,
2022 Domestic area Asia Others Total
Integrated circuits $ 7,244,896 $ 8,841,579 $121,423 $ 16,207,898
Year ended December 31,
2021 Domestic area Asia Others Total
Integrated circuits $ 11,523,346 $ 12,196,154 $125,398 $ 23,844,898
----- End of picture text -----

B. Contract liabilities

The Company has recognised the following revenue-related contract liabilities:

Contract liabilities- advance sales receipts	December 31, 2022 6,096 $	December 31, 2021 21,399 $	January1,2021
			5,336 $

Revenue recognised that was included in the contract liability balance at the beginning of the period:

period:
Interest income Contract liabilities – advance sales receipts Interest income from bank deposits Interest income from financial assets at amortised cost Other interest income	Years ended December 31,
	2022 2021 23,459 $ 5,276 $ Years endedDecember31,	2021
		5,276 $
	2022 82,128 $ 205 973 83,306 $	2021
		26,740 $ 249 265
		27,254 $

(22) Interest income

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(23) Other income

Other income
		Years ended	December31,
		2022		2021
Rent income	$	5,926	$	5,669
Dividend income		771		3,155
Other income, others		62,371		48,029
	$	69,068	$	56,853

(24) Other gains and losses

Other gains and losses
			Years ended	December 31,
			2022		2021
Gains arising from lease modifications		$	1,213		4 $
Foreign exchange gains (losses)			949,763	(	108,007)
(Losses) gains on financial assets at fair value
through profit or loss	(		11,804)		52,007
Impairment loss			-	(	18,302)
Onerous contracts losses	(		530,888)		-
Miscellaneous disbursements	(		48,140)	(	970)
		$	360,144	75,268) ($

(25) Finance costs

Interest expense: Bank borrowings Provisions for liabilities - amortisation of discount Lease liabilities Total interest expense Others	Years ended December 31,	Years ended December 31,
	2022 30,588 $ 1,810 815 33,213 275 33,488 $	2021
		16,829 $ 1,545 1,074
		19,448
		893
		20,341 $

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(26) Expenses by nature

Employee benefit expenses Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortisation charges on intangible assets

	Years ended	December31,	December31,
	2022		2021
$	1,466,873	$	2,424,794
$	496,345	$	392,747
$	8,552	$	7,940
$	970	$	970
$	122,085	$	116,866

(27) Employee benefit expenses

Employee benefit expenses
Wages and salaries Labor and health insurance fees Pension costs Directors' remuneration Other personnel expenses	Years ended December 31,
	2022 2021 1,320,781 $ 2,247,037 $ 71,598 57,726 37,247 32,820 20,195 70,264 17,052 16,947 1,466,873 $ 2,424,794 $

• A. In accordance with the Articles of Incorporation of the Company dated July 12, 2021, the profit before income tax of the current year and before covering employees’ compensation and directors’ remuneration, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 5% for employees’ compensation and shall not be lower than 1% for directors’ remuneration.

• In accordance with the Articles of Incorporation of the Company dated June 15, 2022, the distributable profit of the current year, shall be distributed as employees’ compensation and directors’ remuneration, the ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 1% for directors’ remuneration.

• B. For the years ended December 31, 2022 and 2021, employees’ compensation was accrued at $12,651 and $314,318, respectively; directors remuneration was accrued at $12,651 and $62,864, respectively. The aforementioned amounts were recognised in wages and salaries expenses. The employees’ compensation and directors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit of current year ended December 31, 2022. The employees’ compensation and directors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit of current year ended December 31, 2021.

• C. The employees’ compensation and directors’ remuneration of 2021 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2021 financial statements.

~49~

• D. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(28) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

website of the Taiwan Stock Exchange. tax ome tax expense Components of income tax expense:
			Years ended	December31,
			2022			2021
Current tax:
Current tax on profit for the year		$	306,915		$	931,043
Tax on undistributed earnings			60,944			-
Prior year income tax (over) underestimation			63	(		1,781)
Total current tax			367,922			929,262
Deferred tax:
Origination and reversal of temporary
differences	(		170,323)			3,710
Income tax expense		$	197,599		$	932,972

• (b) The income tax charge relating to components of other comprehensive income: None.

• (c) The income tax charged to equity during the period: None.

• B. Reconciliation between income tax expense and accounting profit:

Tax calculated based on profit before tax and statutory tax rate Tax exempt income by tax regulation Prior year income tax (over) underestimation Temporary differences not recognised as deferred tax assets Effect from investment tax credits Tax on undistributed earnings Income tax expense	Years ended December 31,	Years ended December 31,
	2022	2021
	247,958 $ 15,841) ( 63 70,121 165,646) ( 60,944 197,599 $	1,181,837 $ 9,680) ( 1,781) ( 13,247) ( 224,157) ( - 932,972 $

~50~

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

							Recognised in other 2022	Recognised in other 2022
					Recognised in		comprehensive			December
		January1				profit or loss	income				31
Deferred tax assets:
- Temporary differences:
Bad debt expense		$	48	($		48)	$	-		$	-
Unrealised exchange loss			516	(		400)		-			116
Loss on market value
decline and obsolete
and slow-moving
inventories			249			103,604		-			103,853
Pension liability			81	(		10)		-			71
Onerous contract losses			-			106,178		-			106,178
Others			2,222			752		-			2,974
Subtotal			3,116			210,076		-			213,192
-Deferred tax liabilities:
Unrealised exchange gain	(		5,054)	(		50,154)		-	(		55,208)
Others	(		10,401)			10,401		-			-
Subtotal	(		15,455)	(		39,753)		-	(		55,208)
Total	($		12,339)		$	170,323	$	-		$	157,984

~51~

							Recognised in other 2021	Recognised in other 2021
					Recognised in			comprehensive		December
		January1				profit or loss		income			31
Deferred tax assets:
- Temporary differences:
Bad debt expense		$	48		$	-	$	-		$	48
Unrealised exchange loss			348			168		-			516
Loss on market value
decline and obsolete
and slow-moving
inventories			988	(		739)		-			249
Pension liability			81			-		-			81
Others			2,348	(		126)		-			2,222
Subtotal			3,813	(		697)		-			3,116
-Deferred tax liabilities:
Unrealised exchange gain	(		7,933)			2,879		-	(		5,054)
Others	(		4,509)	(		5,892)		-	(		10,401)
Subtotal	(		12,442)	(		3,013)		-	(		15,455)
Total	($		8,629)	($		3,710)	$	-	($		12,339)

• D. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows:

Deductible temporary differences		December	31,2022 December 31, 2021 646,589 295,986 $
		$

• E. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

~52~

(29) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent company Assumed conversion of all dilutive potential ordinary shares Employee stock options Employees' compensation Diluted earnings per share Profit attributable to ordinary shareholders of the parent company plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent company Assumed conversion of all dilutive potential ordinary shares Employee stock options Employees' compensation Diluted earnings per share Profit attributable to ordinary shareholders of the parent company plus assumed conversion of all dilutive potential ordinary shares	YearendedDecember31,2022
	Amount after Weighted average number of ordinary shares outstanding (shares Earnings per share tax inthousands) (indollars) 1,042,193 $ 280,542 3.71 $ 7 535 1,042,193 $ 281,084 3.71 $ YearendedDecember31,2021		Earnings per share (indollars)
			3.71 $
			3.71 $
	Amount after tax 4,976,211 $ 4,976,211 $	Weighted average number of ordinary shares outstanding (shares inthousands) 280,221 8 2,019 282,248	Earnings per share (indollars)
			17.76 $
			17.63 $

~53~

(30) Supplemental cash flow information

A. Investing activities with partial cash payments:

pplementalcashflow information Investing activities with partial cash payments:
			Years ended	December31,
			2022			2021
Purchase of property, plant and equipment		$	1,250,156		$	854,270
(including transferred amount)
Add: Ending balance of prepayment for equipment			26,568			12,302
Add: Opening balance of prepayment for equipment
being transferred to intangible assets			216			429
Less: Opening balance of prepayment for equipment	(		12,302)	(		68,535)
Add: Opening balance of payable on equipment			94,831			146,904
Less: Ending balance of payable on equipment	(		90,089)	(		94,831)
Cash paid during the year		$	1,269,380		$	850,539
			Years ended	December31,
			2022			2021
Purchase of intangible assets		$	89,670		$	107,305
(including transferred amount)
Less: Opening balance of prepayment for equipment
being transferred to intangible assets	(		216)	(		429)
Cash paid during the year		$	89,454		$	106,876

B. Changes in liabilities from financing activities:

At January 1, 2022 Changes in cash flow from financing activities Interest paid Interest expense Changes in other non-cash items Change from lease modifications At December 31, 2022	Short-term notes and Short-term bills borrowings payable 1,700,000 $ - $ 1,475,000 271 - - - - - 271) ( - - 3,175,000 $ - $	Liabilities from Guarantee financing Long-term Lease deposits activities- borrowings liabilities received gross - $ 70,837 $ 6,533 $ 1,777,370 $ 643,400 8,241) ( 280) ( 2,110,150 - 815) ( - 815) ( - 815 - 815 - 7,576 - 7,305 - 1,473 - 1,473 643,400 $ 71,645 $ 6,253 $ 3,896,298 $	Liabilities from financing activities- gross
			3,896,298 $

~54~

7.

RELATED PARTY TRANSACTIONS A. Names of related parties and relationship Liabilities Short-term from notes and Guarantee financing Short-term bills Lease deposits activities- borrowings payable liabilities received gross At January 1, 2021 1,340,000 $ 149,756 $ 72,929 $ 6,831 $ 1,569,516 $ Changes in cash flow from financing activities 360,000 148,869) ( 7,499) ( 298) ( 203,334 Interest paid - - 1,074) ( - 1,074) ( Interest expense - - 1,074 - 1,074 Changes in other non-cash items - 887) ( 5,702 - 4,815 Changes from lease modifications - - 295) ( - 295) ( At December 31, 2021 1,700,000 $ - $ 70,837 $ 6,533 $ 1,777,370 $ Names of related parties Relationship withthe Company Elite Semiconductor Memory Technology Inc. Subsidiary Charng Feng Investment Ltd. " Jie Yong Investment Ltd. " Elite Investment Services Ltd. " Elite Semiconductor (B.V.I.) Ltd. (Note 1) " Eon Silicon Solutions Inc. USA " Elite Memory Technology Inc. Sub-subsidiary Elite Silicon Technology Inc. (Note 2) " Elite Innovation Japan Ltd. " Elite Semiconductor Microelectronics Technology (shenzhen) Inc. " Elite Semiconductor Microelectronics (Shanghai) Technology Inc. " CHI Microelectronics Limited " HHHtech Co., Ltd. (Note 3) " Arima Lasers Corporation The Company’s subsidiary is the director of Arima Lasers corporation Canyon Semiconductor Inc. Investee indirectly accounted for using equity method

A.

Note 1:Elite Semiconductor (B.V.I.) Ltd. was liquidated in February 2021.

Note 2: Elite Silicon Technology Inc. merged with Elite Semiconductor Memory Technology Inc. in June 2022 ,Elite Silicon Technology Inc. was the dissolved company. Note 3:HHHtech Co., Ltd. was liquidated in March 2022.

~55~

B. Significant transactions and balances with related parties

• A. Operating revenue

Operating revenue
Sales of goods: Associates	2022 2021 7,442 $ 6,556 $ Years ended December 31,
	$

The transaction price and terms of sale of goods with related parties have no significant difference with external parties.

• B. Purchases

difference with external parties. Purchases
Purchases of goods: Subsidiaries	2022 2021 1,071,031 $ 129,842 $ Years ended December 31,
	$

Goods are purchased from subsidiaries on normal commercial terms and conditions.

• C. Receivables from related parties:

D. Payables to related parties: E. Others: Accounts receivable: Other related parties Other receivable-supporting services: Subsidiaries Total Accounts payable: Subsidiaries Other payables-supporting services: Subsidiaries Other income-supporting services: Subsidiaries Research and development expenses: Subsidiaries Selling expenses: Subsidiaries		December 31, 2022		December 31, 2021
		1,482 $ 100 1,582 $ December31,2022		- $ - - $ December31,2021
		2022
		45,000 $ 60,988 $ 81,530 $

~56~

C. Key management compensation

Years ended December 31,

		Years ended	Decemb	er31,
		2022		2021
Salaries and other short-term
employee benefits	$	63,473	$	193,066
Post-employment benefits		522		432
	$	63,995	$	193,498

8. PLEDGED ASSETS

The Company’s assets pledged as collateral are as follows:

Book value

Assets item Land, buildings and structures Time deposits (shown as "other non-current assets")	December31,2022 744,954 $ 3,969 748,923 $	December31,2021 - $ 3,969 3,969 $	Purposes
			Long-term borrowings Guarantee deposits for land leasing

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

1. The Company entered into capacity reservation agreements with suppliers. According to the agreements, the supplier shall provide agreed production capacity with the Company after prepayment by the Company.

2. Unused letters of credit issued

Unused letters of credit issued from purchases by the Company is as follows:

Unused letters of credit issued

December	31, 2022 120,035	December31,2021
$		- $

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The appropriations of 2022 earnings had been approved by the Board of Directors on February 23, 2023.Please refer to Note 6(20).

~57~

12. OTHERS

(1) Capital management

Considering the current industry environment, future operating development, and changes in the external environment, the Company plans the future requirement of working capital, expenditure of research and development and dividends paid to shareholders to safeguard the Company’s ability to continue as a going concern, to provide returns for shareholders, to take care of the benefit of stakeholders, and to maintain an optimal capital structure, so as to promote the shareholders ’ value in the future.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or return capital to shareholders, or repurchase the Company’s shares.

The equity to assets ratios on December 31, 2022 and 2021 were as follows:

Total assets Total liabilities Total equity Equity to assets ratio	December31,2022 December31,2021 19,693,843 $ 20,155,843 $ 8,179,513) ( 7,434,428) ( 11,514,330 $ 12,721,415 $ 58% 63%

~58~

(2) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
Financial assets Financial assets measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost-current Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Time deposits (shown as "Other non-current assets") Refundable deposits (shown as "Other non-current assets") Financial liabilities Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable Accounts payable - related parties Other payables Long-term borrowings(including current portion) Guarantee deposits received (shown as "Other non-current liabilities") Lease liabilities	December31,2022 94,813 $ 6,495 $ 3,705,997 $ - 9 886,551 1,482 81,556 100 3,969 927,380 5,607,044 $ 3,175,000 $ 2,399 2,132,751 88,172 1,432,504 643,400 6,253 7,480,479 $ 71,645 $	December31,2021
		173,513 $
		17,697 $
		8,749,239 $ 110,720 - 1,910,845 - 115,503 - 3,969 841,101
		11,731,377 $
		1,700,000 $ 2,205 2,799,845 52,939 1,830,027 - 6,533
		6,391,549 $
		70,837 $

~59~

• B. Financial risk management policies

• (a) The Company implements comprehensive system of risk management and control to identify, measure and control all categories of risk, including market risk, credit risk, liquidity risk, and risk of cash flow so that management can effectively control and measure market risk, credit risk, liquidity risk, and risk of cash flow.

• (b) The Company’s objective in managing the market risk is to reach optimisation, maintain the proper liquidity and manage all market risks collectively by taking into account the economic environment, competitive edge and risk of market value.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

1. The Company operates internationally and is exposed to foreign exchange risk arising from the various currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

2. Management has set up a policy to require the Company to manage their foreign exchange risk against their functional currency. The Company is required to hedge its entire foreign exchange risk exposure with the Company’s finance team. The Company adopts forward foreign exchange contracts through the Company’s finance team to manage the foreign exchange risk from future commercial transactions and recognised assets and liabilities. The foreign exchange risk will exist when currencies of future commercial transactions and recognised assets and liabilities different from the functional currency of the Company.

3. The Company’s business involves some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD		Foreign currency amount (Inthousands) Exchangerate Book value (NTD) 203,218 $ 30.710 6,240,825 $ 117,452 4.408 517,728 57,575 $ 30.710 1,768,128 $ December31,2022	Foreign currency amount (Inthousands) Exchangerate Book value (NTD) 203,218 $ 30.710 6,240,825 $ 117,452 4.408 517,728 57,575 $ 30.710 1,768,128 $ December31,2022	Foreign currency amount (Inthousands) Exchangerate Book value (NTD) 203,218 $ 30.710 6,240,825 $ 117,452 4.408 517,728 57,575 $ 30.710 1,768,128 $ December31,2022
		Foreign currency amount (Inthousands) 203,218 $ 117,452 57,575 $	Exchangerate 30.710 4.408 30.710
				6,240,825 $ 517,728 1,768,128 $

~60~

		December31,2021	December31,2021
	Foreign currency
		amount			Book value
	(In	thousands)	Exchangerate		(NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD	$	368,999	27.680	$	10,213,892
RMB:NTD		139,387	4.344		605,497
Financial liabilities
Monetary items
USD:NTD	$	73,314	27.680	$	2,029,332

1. The total exchange gains (losses), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2022 and 2021, amounted to $949,763 and ($108,007), respectively.

2. Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	YearendedDecember31,2022
	Sensitivity analysis
	Effect on Degree ofvariation profit or loss 1% 62,408 $ 1% 5,177 1% 17,681) ($	Effect on other comprehensive income
		- $ - - $

~61~

Year ended December 31, 2021

Sensitivity analysis Effect on other Effect on comprehensive Degree of variation profit or loss income

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% $ 102,139 $ - RMB:NTD 1% 6,055 - Financial liabilities Monetary items USD:NTD 1% ($ 20,293) $ -

Price risk

• I. The Company’s equity securities, which are exposed to price risk, are the financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• II. The Company’s investments in equity securities comprise shares and open-end funds issued by the domestic or foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2022 and 2021 would have increased/decreased by $6,316 and $13,492, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $650 and $1,770, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Company’s cash flow interest rate risk arises from long-term borrowings and shortterm borrowings with variable rate. During the years ended December 31, 2022 and 2021, the Company’s borrowings at variable rate were denominated in the NTD.

• ii. If the borrowing interest rate had increased/decreased by 0.2% with all other variables held constant, profit, net of tax for the years ended December 31, 2022 and 2021 would have increased/decreased by $6,109 and $2,720, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

~62~

(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of financial instruments stated at amortised cost and debt instruments at fair value through profit or loss.

• ii. The Company manages its credit risk taking into consideration the entire Company’s concern. For banks and financial institutions, only these with good rating are accepted. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by management. The utilisation of credit limits is regularly monitored.

• iii. The Company adopts the assumption under IFRS 9, the default occurs when the contract payments are past due over 90 days.

• iv. The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i)It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

• (ii)The disappearance of an active market for that financial asset because of financial difficulties;

• (iii)Default or delinquency in interest or principal repayments;

• (iv)Adverse changes in national or regional economic conditions that are expected to cause a default.

• vi. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights.

• vii. The financial assets at amortised cost include time deposits and restricted time deposits. The banks have good rating and have no past due before. In addition to the above, the whole economic environment has not changed significantly, so the risk of credit risk is low and the effect to the financial statements is insignificant.

~63~

• viii. The information about ageing analysis and collaterals of accounts receivable is provided in Note 6(4). The Company requests its significant sales customers to provide collaterals or other rights of guarantee, therefore, the Company classifies customers’ accounts receivable in accordance with the nature of collaterals. The Company applies the simplified approach using loss rate methodology to assess expected credit loss. Based on the assessment, the allowance for losses that the Company should recognise is immaterial on December 31, 2022 and 2021.

• IX. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable is as follows:

		2022			2021
		Accounts receivable			Accounts receivable
At January 1	$	-		$	5,713
Reversal of impairment loss		-	(		5,713)
At December 31	$	-		$	-

• (c) Liquidity risk

• I. Cash flow forecasting is performed in the operating entities of the Company and aggregated by the Company’s finance team. The Company’s finance team monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• II. Surplus cash held by the operating entities over and above balance required for working capital management should be invested in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

• III. The table below analyses the Company’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

~64~

Non-derivative financial liabilities: December 31, 2022 Short-term borrowings Notes payable Accounts payable Accounts payable - related parties Other payables Lease liabilities Long-term borrowings (including current portion) Guarantee deposits received Derivative financial liabilities: None. Non-derivative financial liabilities: December 31, 2021 Short-term borrowings Notes payable Accounts payable Accounts payable - related parties Other payables Lease liabilities Guarantee deposits received Derivative financial liabilities: None.	Less than 1 year 3,175,000 $ 2,399 2,132,751 88,172 1,432,504 10,090 - - Less than 1 year 1,700,000 $ 2,205 2,799,845 52,939 1,830,027 8,496 -	Between 1 and 5 years - $ - - - - 23,478 139,102 - Between 1 and5 years - $ - - - - 22,592 -	Over5 years
			- $ - - - - 44,894 579,295 6,253 Over5 years
			- $ - - - - 48,666 6,533

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and emerging stocks, beneficiary certificates and debt securities are included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(9).

~65~

• C. Financial instruments not measured at fair value of the Company include cash and cash equivalents, time deposits (over three-month periods), notes receivable, accounts receivable, other receivables, refundable deposits, short-term borrowings, long-term borrowings, notes payable, accounts payable, other payables, lease liabilities (current and non-current) and guarantee deposits received. Their carrying amounts approximate to their fair values.

• D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

• (a) The related information of nature of the assets and liabilities is as follows:

December 31, 2022 Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Total Financial liabilities: None. December 31, 2021 Assets Recurring fair value measurement Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Total Financial liabilities: None.	Level 1 7,152 $ 56,009 31,652 - 94,813 $ Level 1 77,602 $ 57,320 38,591 - 173,513 $	Level 2 - $ - - - - $ Level 2 - $ - - - - $	Level3 - $ - - 6,495 6,495 $ Level3 - $ - - 17,697 17,697 $	Total
				7,152 $ 56,009 31,652 6,495
				101,308 $
				Total
				77,602 $ 57,320 38,591 17,697
				191,210 $

~66~

• (b) The methods and assumptions that the Company used to measure fair value are as follows:

• i. The instruments that the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed and emerging stocks Open-end fund Market quoted price Closing price Net asset value

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• E. For the years ended December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

• F. The following table is the movement of Level 3 for the years ended December 31, 2022 and 2021:

2021:
			Equityinstrument
			2022		2021
At January 1		$	17,697	$		32,418
Valuation adjustment	(		11,202)	(		14,721)
At December 31		$	6,495	$		17,697

~67~

• G. Accounting segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

value measurement:
Non-derivative equity Unlisted shares Non-derivative equity Unlisted shares	Fair value at December 31,2022	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	6,495 $ Fair value at December 31,2021	Market - comparable companies Valuation technique	Discount for lack of marketability Significant unobservable input	45% Range (weighted average)	The higher the discount of lack of marketability, the lower the fair value Relationship of inputs to fair value
	17,679 $	Market - comparable companies	Discount for lack of marketability	45%	The higher the discount of lack of marketability, the lower the fair value

~68~

• A. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

December 31, 2022

==> picture [445 x 287] intentionally omitted <==

----- Start of picture text -----

Recognised in profit or Recognised in other
loss comprehensive income
Favourable Unfavourable Favourable Unfavourable
Input Change change change change change
Financial assets
Discount for
Equity
lack of ± 10% $ - $ - $ 531 ($ 531)
instrument
marketability
December 31, 2021
Recognised in profit or Recognised in other
loss comprehensive income
Favourable Unfavourable Favourable Unfavourable
Input Change change change change change
Financial assets
Discount for
Equity
lack of ± 10% $ - $ - $ 1,448 ($ 1,448)
instrument
marketability
----- End of picture text -----

(4) Others

As at the reporting date, the Company has assessed that the Covid-19 pandemic has no adverse impact on the Company’s overall operating activities and financial statements for the year ended December 31, 2022. However, the Company will continue to monitor the development of the Covid-19 pandemic and assess its overall impact on the economic environment.

13. SUPPLEMENTARY DISCLOSURES

• (1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: None.

~69~

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 2.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paidin capital or more: Please refer to table 3.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more:

  • Please refer to table 4.

• I. Trading in derivative instruments undertaken during the reporting period: None.

• J. Significant inter-company transactions during the reporting period: Please refer to table 5.

• (2) Information on investees

Names, locations, and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

• (3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

• (4) Major shareholders information

• As at December 31, 2022, the Company had no shareholders who hold over 5% (including 5%) of the Company’s shares.

~70~

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 1

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----- Start of picture text -----

Item Description Amount
Petty cash $ 115
Bank deposits
Demand deposits -New Taiwan Dollar 296,010
-Foreign currency USD 13,405 exchange rate 30.71 411,676
EUR 1 exchange rate 32.72 20
RMB 927 exchange rate 4.408 4,085
Checking accounts deposits - New Taiwan Dollar 7
Time deposits - New Taiwan Dollar 10,000
Time deposits - Foreign currency USD 80,505 exchange rate 30.71 2,472,315
RMB 116,100 exchange rate 4.408
511,769
$ 3,705,997
----- End of picture text -----

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF ACCOUNTS RECEIVABLES

DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 2 CustomerName Description General customer AA company BB company CC company DD company Others Less:Allowance for bad debt Related parties		Amount Note 330,675 $ 73,239 52,565 45,498 The balance of each customer has 384,574 not exceeded 5% of the accounts receivable. 886,551 - 886,551 The accounts receivable past due over one year amounted to $0. 1,482 888,033 $
		$
		$

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF INVENTORIES

DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 3

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----- Start of picture text -----

Amount
Item Description Cost Net realisable value Note
----- End of picture text -----

Raw materials 459,626 $ Work in progress 6,467,614 Finished goods 2,280,691 Inventory in transit 4,424 9,212,355 $ 865,439) ( 8,346,916 $ Less: Allowance on market value decline and obsolete and slow-moving inventories	449,546 $ The net realisable value is net market value. 6,200,920 " 2,172,542 " 4,424 The replacement cost is net market value. 8,827,432 $

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 4

Name	BeginningBalance	BeginningBalance	Increase(note 1)	Increase(note 1)	Decrease(note 1)	Decrease(note 1)	EndingBalance	EndingBalance	EndingBalance	Market Value or Net EquityValue	Market Value or Net EquityValue	Basis of valuation	Collateral orpledge	Note
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Ownership	Amount	Unit Price	Total Amount
Elite Semiconductor Memory Technology Inc. Charng Feng Investment Ltd. Elite Investment Services Ltd. Jie Yong Investment Ltd. Eon Silicon Solutions Inc. USA	100,000 50,000,000 15 3,600,000 200,000	20,551 $ 566,029 612,100 188,931 1,682) ( 1,385,929 $	- - - - -	9,174 $ - 55,446 - 32 64,652 $	- - - - -	- $ 16,673) ( - 9,976) ( - 26,649) ($	100,000 50,000,000 15 3,600,000 200,000	100% 100% 100% 41.86% 100%	29,725 $ 549,356 667,546 178,955 1,650) ( 1,423,932 $	297 11 44,503,067 50 8) (	29,725 $ 549,356 667,546 178,955 1,650) ( 1,423,932 $	Equity method " " " "	None " " " "

Note 1: The amount increased and decreased in the period comprise cumulative translation adjustments, valuation adjustment on financial assets and subsidiary own the Company’s share.

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 5

Item		Beginning Balance		Increase		Decrease	Transfer EndingBalance - $ 562,898 $ - 1,019,309 9,259 756,256 2,826 375,208 - 2,319,650 12,085 $ 5,033,321 $	Collateral Note Long-term borrowings Long-term borrowings None None None
Land Buildings and structures Machinery equipment Testing equipment Other equipment		168,768 $ 667,335 700,438 329,940 1,916,684 3,783,165 $		394,130 $ 351,974 46,559 42,442 402,966 1,238,071 $		- $ - - - - - $

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 6

Statement 6
Item Buildings and structures Machinery equipment Testing equipment Other equipment	BeginningBalance Increase 433,861) ($ 37,071) ($ 413,484) ( 56,683) ( 194,253) ( 31,779) ( 1,504,031) ( 370,812) ( 2,545,629) ($ 496,345) ($		Decrease		Transfer	EndingBalance Note 470,932) ($ 470,167) ( 226,032) ( 1,874,843) ( 3,041,974) ($
			- $ - - - - $		- $ - - - - $

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF ACCOUNTS PAYABLES

DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 7

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----- Start of picture text -----

Customer Name Description Amount Note
----- End of picture text -----

General customer: A supplier B supplier C supplier D supplier E supplier Others Related parties	1,143,839 $ 231,832 140,028 132,800 111,519 372,733 The balance of each supplier has not exceeded 5% of the accounts payable. 2,132,751 88,172 2,220,923 $

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF LONG-TERM BORROWINGS DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 8

Creditor Description Amount Contract Period Interest Rate Collateral or pledge Note CHANG HWA COMMERCIAL BANK, Land 、 building and LTD. Long-term secured borrowings $ 643,400 2022.10.7~2037.10.7 1.425% ~ 1.55% structures 643,400 - Less:Current portion $ 643,400

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF OPERATING REVENUE YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 9

Item Quantities Amount Note Sales revenue 1,163,656 thousands $ 16,308,448 Less: sales returns and discounts 1,187 thousands ( 100,550) Net sales revenue $ 16,207,898

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF OPERATING COSTS YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 10

Statement 10
Item Direct material Raw materials at beginning Add: Material purchased for the period Less: Transferred to expenses Raw material at the end Transferred to scrap Raw material consumed Direct labor Manufacturing overheads Manufacturing cost Work in progress at the beginning Add: Work in progress purchased Less: Transferred to expenses Work in progress at the end Others Cost of finished goods Add: Finished goods at the beginning Finished goods purchased Transferred from expenses Less: Transferred to expenses Finished goods at the end Others Total cost of goods sold Employees’ compensation Scrapped raw material Allowance on market value decline and obsolete and slow-moving inventories Total operating costs	Amount
	58,400 $ 6,139,636 3,794) ( 459,626) ( 113,943) ( 5,620,673 37,266 2,566,721 8,224,660 3,688,463 7,506,300 13,491) ( 6,467,614) ( 58) ( 12,938,260 1,621,180 25,024 44,509 11,236) ( 2,280,691) ( 2,481) ( 12,334,565 1,276 113,943 840,553 13,290,337 $

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF MANUFACTURING OVERHEADS YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 11

Statement 11
Item Description		Amount	Note
Processing fee	$	1,834,876
Depreciation charge		390,879
			The balance of each accounts has
			not exceeded 5% of the
Other expenses		340,966	manufacturing overheads.
Total	$	2,566,721

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF SELLING EXPENSES YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 12

Statement 12
Item Description		Amount	Note
Salaries and wages	$	143,486
Labor fee		89,051
Fee of import and export		39,114
			The balance of each accounts has not
Other expenses		65,488	exceeded 5% of the selling expenses.
Total	$	337,139

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF ADMINISTRATIVE EXPENSES YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 13

Statement 13
Item	Description Amount Note 222,561 $ 20,718 16,293 62,118 The balance of each accounts has not exceeded 5% of the administrative expenses. 321,690 $
Salaries and wages Labor fee Depreciation charge Other expenses Total

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 14

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----- Start of picture text -----

Item Description Amount Note
----- End of picture text -----

Salaries and wages Testing cost Amortisation expenses Depreciation expense Research and development expenses Other expenses Total	870,875 $ 140,579 118,511 88,755 77,638 236,828 The balance of each accounts has not exceeded 5% of the administrative expenses. 1,533,186 $

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTISATION EXPENSES BY FUNCTION FOR THE CURRENT PERIOD YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 15

Statement 15
Nature Function	Year ended December 31,2022			Year ended December 31,2021
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee Benefit Expense
Wages and salaries	$ 104,054	$ 1,216,727	$ 1,320,781	$ 273,354	$ 1,973,683	$ 2,247,037
Labour and health insurance fees	10,189	61,409	71,598	8,857	48,869	57,726
Pension costs	4,491	32,756	37,247	4,457	28,363	32,820
Directors'remuneration	-	20,195	20,195	-	70,264	70,264
Other employee benefit expenses	2,782	14,270	17,052	2,951	13,996	16,947
Depreciation Expense	390,879	114,988	505,867	291,654	110,003	401,657
Amortisation expense	-	122,085	122,085	3,824	113,042	116,866

Note:

1. As at December 31, 2022 and 2021, the average number of the Company’s employee were 516 and 493, respectively, including 6 and 5 directors who didn't concurrently serve as employees.

2. For the entity that its shares are listed on Taiwan Stock Exchange or traded in the Taipei Exchange, the following additional disclosures are required:

3. (1) ) The average employee benefit expense for the current year was $2,837.

4. (“total employee benefit expense for the current year – total directors’ remuneration”/ “the number of employees in the current year–the number of directors who didn't concurrently serve as employees.”).

The average employee benefit expense for the previous year was $4,825.

• (“total employee benefit expense for the previous year–total directors’ remuneration”/ “the number of employees in the previous year–the number of directors who didn't concurrently serve as employees.”).

• (2) The average employee salaries and wages for the current year was $2,590. (total salaries and wages for the current year/ "the number of employees in the current year– the number of directors who didn't concurrently serve as employees.”).

The average employee salaries and wages for the previous year was $4,605.

(total salaries and wages for the previous year/ “the number of employees in the previous year – the number of directors who didn't concurrently serve as employees.”)

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTISATION EXPENSES BY (Cont.) FUNCTION FOR THE CURRENT PERIOD

YEAR ENDED DECEMBER 31, 2022

(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

Statement 15

• (3) The variation in the adjustments of the average employee salaries and wages was-44%.

• (“the average employee salaries and wages for the current year– the average employee salaries and wages for the previous year”/ the average employee salaries and wages for the previous year)

• (4) The Company’s compensation policies (including directors, supervisors, executive officers and employees).

According to the Company’s Articles of Incorporation, the Compensation Committee determine the salary for the directors, taking into account the extent and value of the services provided for the management of the Company and the standards of the industry within the R.O.C. then submitted to the Board of Directors for approval. The Company could set different salaries between independent directors and general directors. According to the Company’s Articles of independent directors, the salary for the independent directors should on Articles of Incorporation or been approved by stockholders’ meeting, and could set reasonable salaries that different from general directors.

The Company’s compensation policies of executive officers and employees are based on fixed salary of salary structure, including base salary, meal allowance, variable salary (including overtime wage and delay meal allowance), and bonus (including year-end bonus, supplemental wage).

The salary of the position is accordance with the salary standards of the industry, responsibilities in the Company and the services provided for the operational objectives of the Company.

Besides operational performance, future business risk in industry and trend of development, the Company also take personal performance and services provided to the performance of the Company for reference to determine reasonable salary.

The performance assessment and rationality of performance about executive officers are reviewed by Compensation Committee and Board of Directors, and also adjust the system of salary through actual operating conditions and related laws.

In accordance with the Articles of Incorporation of the Company, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 1% for directors’ remuneration.

Table 1

Expressed in thousands of NTD

(Except as otherwise indicated)

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Holding of marketable securities at the end of the period

December 31, 2022

Securities held by	Name and category of marketable securities	Relationship with the securities issuer	General ledger account		As at December 31,2022	As at December 31,2022		Footnote
				Number of shares	Book value (Note 1)	Ownership (%)	Fair value (Note 1)
Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Investment Services Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Jie Yong Investment Ltd.	Arima Lasers Corporation stock King Yuan Electronics Corporation stock HSBC FRN PERPETUAL bond ANZ FRN PERPETUAL bond BGF RENMINBI BOND FUND Turning Point Lasers Ltd, preferred stock HSBC ALL CHINA BOND FUND - AC (2802) Arima Lasers Corporation stock King Yuan Electronics Corporation stock M2 Communication Inc. stock Powership Semiconductor Manufacturing Corporation Turning Point Lasers Ltd, preferred stock Elite Semiconductor Microelectronics Technology Inc. stock	Note 2 None None None None None None Note 3 None None None None Parent Company	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income	256,700 10,000 1,000,000 500,000 127,986 1,000,000 600,000 997,700 10,000 201,084 1,630,426 1,000,000 13,709,000	$ 6,790 362 21,307 10,345 56,009 6,495 31,603 26,389 362 414 51,929 6,495 891,085	0.83 0.00 Not applicable Not applicable Not applicable 8.06 Not applicable 3.22 0.00 1.61 0.04 8.06 4.79	$ 6,790 362 21,307 10,345 56,009 6,495 31,603 26,389 362 414 51,929 6,495 891,085

Note 1: Valuation adjustment of financial assets and cumulative translation differences are included. Note 2: The Company's subsidiary is a director of the company. Note 3: Charng Feng Investment Ltd. is a director of the company.

Table 1

Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Year ended December 31, 2022

If the counterparty is a related party, information as to the

Real estate acquired by	Real estate acquired	Date of the event	Transaction amount	Status of payment	Counterparty	Relationship with the counterparty		last transaction of the real estate	last transaction of the real estate		Basis or reference used in setting the price	Reason for acquisition of real estate and status of the real estate	Other commitments
							Original owner who sold the real estate to the counterparty	Relationship between the original owner and the acquirer	Date of the original transaction	Amount
Elite Semiconductor Microelectronics Technology Inc.	Land and buildings	May 31, 2022	$756,950	Paid in cash	Madison Asset Management Corporation	None	-	-	-	$ -	The appraised amount is $771,715 based on the appraisal report issued by the appraisers.	Self-used office	None

Table 2

Table 3

Expressed in thousands of NTD

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2022

(Except as otherwise indicated)

Differences in transaction terms

compared to third party

							Differences in transaction terms compared to third party	Differences in transaction terms compared to third party
Purchase/seller	Counterparty	Relationship with the counterparty		Transaction			transactions		Notes/accounts receivable(payable)		Footnote
			Purchase (sales)	Amount	Percentage of total purchase (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
CHI Microelectronics Limited	Elite Semiconductor Microelectronics Technology Inc.	Ultimate parent company	Sales	1,081,732 $	6.67%	monthly payment in 15 days	$ -	-	88,172 $	9.16%

Table 3

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2022

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2022	Turnover(times)	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance date	Allowance for doubtful accounts
					Amount	Action taken
CHI Microelectronics Limitd	Elite Semiconductor Microeletronics Technology Inc.	Ultimate parent company	88,172 $	15.37	$ -	-	88,172 $	- $

Table 4

Table 5

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC. Significant inter-company transactions during the reporting period Year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note3)
1	CHI Microelectronics Limited	Elite Semiconductor Microelectronics Technology Inc.	(2)	Sales	1,081,732 $	Note 4	6.67%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

(3) Subsidiary to subsidiary

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: The transaction terms are decided by the two parties through negotiation.

Note 5: The disclosure requirement for the above disclosed amount is 1% of the consolidated total assets for balance sheet accounts and 1% of the consolidated total revenue for income statement accounts. Note 6: The transaction between parent company to subsidiary and subsidiaries were eliminated when preparing consolidated financial statements.

Table 5

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Information on investees (exclude investees in Mainland China)

Year ended December 31, 2022

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December31,2022	Balance as at December 31, 2021	Numberofshares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the year ended December31,2022	Investment income (loss) recognised by the Company for the year ended December31,2022	Footnote
Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Elite Semiconductor Microelectronics Technology Inc. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd. Charng Feng Investment Ltd.	Elite Semiconductor Memory Technology Inc. Charng Feng Investment Ltd. Elite Investment Services Ltd. Jie Yong Investment Ltd. Eon Silicon Solutions, Inc. USA Elite Memory Technology Inc. Elite Silicon Technology Inc. Canyon Semiconductor Inc. Elite Innovation Japan Ltd. CHI Microelectronics Limited HHHtech Co., Ltd.	Taiwan Taiwan British Virgin Islands Taiwan U.S.A. Taiwan Taiwan Taiwan Japan Hong Kong Taiwan	Research and development, production, sales and related consulting services of integrated circuit General investment General investment General investment Product design, development and test Product design, wholesale and retail of electronic materials, manufacturing of electronic compenents, information software services and international trade Product design, wholesale and retail of electronic materials, manufacturing of electronic compenents, information software services and international trade International trade, manufacturing of electronic components, product design and information software services Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade General trading Information software services, product design, management consultant and international trade	$ 272 500,000 460,650 270,000 13,304 69,407 - 80,337 2,276 394 -	$ 272 500,000 460,650 270,000 13,304 69,407 61,229 80,337 2,276 394 15,000	100,000 50,000,000 15 3,600,000 200,000 10,000,000 - 8,350,000 200 10,000 -	100 100 100 41.86 100 100 - 37.28 100 100 -	$ 29,725 549,356 667,546 178,955 1,650) ( 21,448 - 103,857 821 439 -	15,279 $ 35,161) ( 55,447 105,923 32 164) ( 1,046 60,412 90 271) ( 324) (	15,279 $ 35,161) ( 55,447 381) ( 32 164) ( 1,027 23,880 90 271) ( 243) (	Note 3 Note 3 Note 2

Note 1: The foreign investment amount was translated at the exchange rate as at December 31, 2022 Note 2: The subsidiary of the Company-Charng Feng Investment Ltd. participated in HHHtech Co., Ltd. issuance of common stocks for cash in March 2021, and holds 75% of HHHtech Co., common stocks issued. On June 28, 2021, the special meeting of shareholders of HHHtech Co., resolved to liquidate, and the effective date of the liquidation was set on March 3, 2022. The liquidation letter was received from Department of Commerce, MOEA on March 15, 2022.

Note 3: For the purpose of the Group’s resource integration, the subsidiary of the Company, Elite Semiconductor Memory Technology Inc. merged with Elite Silicon Technology Inc. Elite Semiconductor Memory Technology Inc. is the surviving company, and Elite Silicon Technology Inc. is the dissolved company. The effective date for the merger was set on June 30, 2022.The liquidation letter was received from Department of Commerce, MOEA on August 2, 2022.

Table 6

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Information on investments in Mainland China Year ended December 31, 2022

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Investeein Mainland China	Mainbusiness activities	Paid-in Capital (Note4)	Investment method (Note1)	Accumulated amount of remittance from Taiwan to Mainland China as at January1,2022	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year endedDecember31,2022	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year endedDecember31,2022	Accumulated amount of remittance from Taiwan to Mainland China as at December 31,2022	Net income (loss) of investee for the year ended December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2022 (Note2)	Book value of investment in Mainland China as at December 31,2022	Accumulated amount of investment income remitted back to Taiwan as atDecember31,2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Elite Semiconductor Microelectronics Technology (shenzhen) Inc. Elite Semiconductor Microelectronics Technology (Shanghai) Inc.	Trading of goods or technical services, develop and sale products of networking system, storage, and peripherals, technical consulting services of integrated circuit, and after - sales services Product design, wholesale and retail of electronic materials, software design services and international trade	93,343 $ 6,142	(1) (1)	93,343 $ 6,142	- $ -	- $ -	93,343 $ 6,142	4,083 $ 1,573	100 100	4,083 $ 1,573	92,034 $ 8,584	- $ -	Note 5 Note 6

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as at December31,2022	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling of investments in Mainland China imposed by the Investment Commission of MOEA
Charng Feng Investment Ltd.	99,485 $	99,485 $	$ 329,614

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

Note 2: Investment income (loss) was recognised based on financial statements prepared by each company which were audited by independent auditors.

Note 3: The amount of the statement should show as New Taiwan dollars. Note 4: Paid-in capital and investment amount translated at the exchange rate as at December 31, 2022.

Note 5: The Company's subsidiary, Charng Feng Investment Ltd., obtained the revised investment amount of USD 39,485.42, USD 2,500,000, and USD 500,000 approved by the Investment Commission, MOEA on February 6, 2020, July 10, 2020 and November 30, 2021, respectively. Note 6: The Company's subsidiary, Charng Feng Investment Ltd., obtained the investment amount of USD 200,000 approved by the Investment Commission of MOEA in May 20, 2020.

Table 7